Karnataka HC quashes lifetime tax on non-KA vehicles plying for over 30 days

The high court on Thursday struck down a rule that required owners of vehicles registered in other states to pay lifetime tax in Karnataka for using their vehicles here for more than 30 days at a stretch.Vasantha Kumar | March 11, 2016, 11:51 IST

BENGALURU: The high court on Thursday struck down a rule that required owners of vehicles registered in other states to pay lifetime tax in Karnataka for using their vehicles here for more than 30 days at a stretch. The court found the rule at variance with a central law that mandated payment of the tax only if the vehicle registered in one state is used in another for more than 12 months.

Allowing a batch of petitions filed by Jagadev Biradar, a resident of Pune, and others, Justice Anand Byrareddy held unconstitutional the explanation 2 to section 3 of the Karnataka Motor Vehicles Taxation Act, 2014, that made it mandatory for owners of non-KA vehicles to pay lifetime tax in the state if their vehicle is used continuously for more than a month (30 days) in Karnataka.

The court also quashed the notices issued by the authorities to the petitioners demanding payment of lifetime tax.

"Lifetime tax is always linked to registration under the central Motor Vehicles Act, 1988. Under the Karnataka Motor Vehicles Act, the government cannot levy tax on a vehicle already registered in some other state on the presumption that it is in Karnataka for more than 30 days. This directly varies from the 12 month period prescribed under section 47 of the central law," the judge observed.

The state government had contended that the state legislature has the power to amend the law.

The court noted that the very language employed in the amendment explanation indicates the clumsy and ham-handed manner in which the state legislature sought to undo the decision of the high court which had, in 2005, said that lifetime tax is linked to registration. The HC decision has attained finality as it was never questioned, the judge observed.

The petitioners claimed that some of them are in the city for temporary period owing to the nature of their jobs and some are frequent visitors from neighbouring states and their vehicles were impounded by the authorities demanding payment of lifetime tax under the new rule.

The petitioners, who challenged the constitutional validity of the Karnataka Motor Vehicles Taxation Amendment Act, 2014, contended that the amendment is non-existent in the eye of law as it seeks to violate Article 254(1) of the Constitution which gives primacy to the law passed by parliament.

"It is not even an actual amendment but changes made through explanation to section 3 of KMV Act and that itself is beyond the scope of the main section. Lifetime tax is linked to registration and the state legislature has no power to extend 12 months period in the MV Act to register in another state," the petitioners said.

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